Enabling the freight traffic controller for collaborative multi-drop urban logistics: practical and theoretical challenges

There is increasing interest in how horizontal collaboration between parcel carriers might help alleviate problems associated with last-mile logistics in congested urban centers. Through a detailed review of the literature on parcel logistics pertaining to collaboration, along with practical insights from carriers operating in the United Kingdom, this paper examines the challenges that will be faced in optimizing multicarrier, multidrop collection, and delivery schedules. A “freight traffic controller” (FTC) concept is proposed. The FTC would be a trusted third party, assigned to equitably manage the work allocation between collaborating carriers and the passage of vehicles over the last mile when joint benefits to the parties could be achieved. Creating this FTC concept required a combinatorial optimization approach for evaluation of the many combinations of hub locations, network configuration, and routing options for vehicle or walking to find the true value of each potential collaboration. At the same time, the traffic, social, and environmental impacts of these activities had to be considered. Cooperative game theory is a way to investigate the formation of collaborations (or coalitions), and the analysis used in this study identified a significant shortfall in current applications of this theory to last-mile parcel logistics. Application of theory to urban freight logistics has, thus far, failed to account for critical concerns including (a) the mismatch of vehicle parking locations relative to actual delivery addresses; (b) the combination of deliveries with collections, requests for the latter often being received in real time during the round; and (c) the variability in travel times and route options attributable to traffic and road network conditions

Approaching delivery as a service

This paper explores the new logistics business model of Delivery as a Service, a concept aiming at a more efficient, fast and customer-oriented practice, linking IT solution development, urban logistics operations, supply chain efficiency and new business models. Delivery as a Service (DaaS) is defined as a service-oriented delivery and business processes in line with customer expectations and needs in the on-demand economy. The approach of this paper is an industry report based on evidence collected in multiple exploratory European projects integrating ambitious and strategic findings on Internet of Things, urban planning, consolidation centres, transport optimisation, and clean vehicle use. It contributes to a future scenario of urban logistics business models

Hybrid Vehicle-drone Routing Problem For Pick-up And Delivery Services Mathematical Formulation And Solution Methodology

The fast growth of online retail and associated increasing demand for same-day delivery have pushed online retail and delivery companies to develop new paradigms to provide faster, cheaper, and greener delivery services. Considering drones’ recent technological advancements over the past decade, they are increasingly ready to replace conventional truck-based delivery services, especially for the last mile of the trip. Drones have significantly improved in terms of their travel ranges, load-carrying capacity, positioning accuracy, durability, and battery charging rates. Substituting delivery vehicles with drones could result in $50M of annual cost savings for major U.S. service providers. The first objective of this research is to develop a mathematical formulation and efficient solution methodology for the hybrid vehicle-drone routing problem (HVDRP) for pick-up and delivery services. The problem is formulated as a mixed-integer program, which minimizes the vehicle and drone routing cost to serve all customers. The formulation captures the vehicle-drone routing interactions during the drone dispatching and collection processes and accounts for drone operation constraints related to flight range and load carrying capacity limitations. A novel solution methodology is developed which extends the classic Clarke and Wright algorithm to solve the HVDRP. The performance of the developed heuristic is benchmarked against two other heuristics, namely, the vehicle-driven routing heuristic and the drone-driven routing heuristic. Anticipating the potential risk of using drones for delivery services, aviation authorities in the U.S. and abroad have mandated necessary regulatory rules to ensure safe operations. The U.S. Federal Aviation Administration (FAA) is examining the feasibility of drone flights in restricted airspace for product delivery, requiring drones to fly at or below 400-feet and to stay within the pilot’s line of sight (LS). Therefore, a second objective of this research is considered to develop a modeling framework for the integrated vehicle-drone routing problem for pick-up and delivery services considering the regulatory rule requiring all drone flights to stay within the pilot’s line of sight (LS). A mixed integer program (MIP) and an efficient solution methodology were developed for the problem. The solution determines the optimal vehicle and drone routes to serve all customers without violating the LS rule such that the total routing cost of the integrated system is minimized. Two different heuristics are developed to solve the problem, which extends the Clarke and Wright Algorithm to cover the multimodality aspects of the problem and to satisfy the LS rule. The first heuristic implements a comprehensive multimodal cost saving search to construct the most efficient integrated vehicle-drone routes. The second heuristic is a light version of the first heuristic as it adopts a vehicle-driven cost saving search. Several experiments are conducted to examine the performance of the developed methodologies using hypothetical grid networks of different sizes. The capability of the developed model in answering a wide variety of questions related to the planning of the vehicle-drone delivery system is illustrated. In addition, a case study is presented in which the developed methodology is applied to provide pick-up and delivery services in the downtown area of the City of Dallas. The results show that mandating the LS rule could double the overall system operation cost especially in dense urban areas with LS obstructions

The two-echelon capacitated vehicle routing problem: models and math-based heuristics

Multiechelon distribution systems are quite common in supply-chain and logistics. They are used by public administrations in their transportation and traffic planning strategies, as well as by companies, to model own distribution systems. In the literature, most of the studies address issues relating to the movement of flows throughout the system from their origins to their final destinations. Another recent trend is to focus on the management of the vehicle fleets required to provide transportation among different echelons. The aim of this paper is twofold. First, it introduces the family of two-echelon vehicle routing problems (VRPs), a term that broadly covers such settings, where the delivery from one or more depots to customers is managed by routing and consolidating freight through intermediate depots. Second, it considers in detail the basic version of two-echelon VRPs, the two-echelon capacitated VRP, which is an extension of the classical VRP in which the delivery is compulsorily delivered through intermediate depots, named satellites. A mathematical model for two-echelon capacitated VRP, some valid inequalities, and two math-heuristics based on the model are presented. Computational results of up to 50 customers and four satellites show the effectiveness of the methods developed

Towards an IT-based Planning Process Alignment: Integrated Route and Location Planning for Small Package Shippers

To increase the efficiency of delivery operations in small package shipping (SPS), numerous optimization models for routeand location planning decisions have been proposed. This operations research view of defining independent problems hastwo major shortcomings: First, most models from literature neglect crucial real-world characteristics, thus making themuseless for small package shippers. Second, business processes for strategic decision making are not well-structured in mostSPS companies and significant cost savings could be generated by an IT-based support infrastructure integrating decisionmaking and planning across the mutually dependent layers of strategic, tactical and operational planning. We present anintegrated planning framework that combines an intelligent data analysis tool, which identifies delivery patterns and changesin customer demand, with location and route planning tools. Our planning approaches extend standard Location Routing andVehicle Routing models by crucial, practically relevant characteristics like the existence of subcontractors on both decisionlevels and the implicit consideration of driver familiarity in route planning

A robust solving strategy for the vehicle routing problem with multiple depots and multiple objectives

This document presents the development of a robust solving strategy for the Vehicle Routing Problem with Multiple Depots and Multiple Objectives (MO-MDVRP). The problem tackeled in this work is the problem to minimize the total cost and the load imbalance in vehicle routing plan for distribution of goods. This thesis presents a MILP mathematical model and a solution strategy based on a Hybrid Multi- Objective Scatter Search Algorithm. Several experiments using simulated instances were run proving that the proposed method is quite robust, this is shown in execution times (less than 4 minutes for an instance with 8 depots and 300 customers); also, the proposed method showed good results compared to the results found with the MILP model for small instances (up to 20 clients and 2 depots).MaestríaMagister en Ingeniería Industria

Research of Oil Product Secondary Distribution Optimization Based on Collaborative Distribution

AbstractDuring peak seasons, the petrol company's oil supply capacity is insufficient, therefore, with limited trucks, adjusting the distribution quantity of petrol station and formulating an effective distribution route can minimize the total cost and maximize the vehicle utilization. In this paper we observe the extension of the multi-depot half open vehicle routing problem with time windows (MDHOVRPTW) in oil product secondary distribution. Based on the characteristics of secondary distribution and MDHOVRPTW problem, this paper formulates oil distribution model intra-area with distribution quantity and distribution routing as decision variables. A proposed algorithm is applied to solve this model and result compared with the traditional non-cooperative method to verify the effectiveness of collaborative distribution

Roulette-Wheel Selection-Based PSO Algorithm for Solving the Vehicle Routing Problem with Time Windows

The well-known Vehicle Routing Problem with Time Windows (VRPTW) aims to reduce the cost of moving goods between several destinations while accommodating constraints like set time windows for certain locations and vehicle capacity. Applications of the VRPTW problem in the real world include Supply Chain Management (SCM) and logistic dispatching, both of which are crucial to the economy and are expanding quickly as work habits change. Therefore, to solve the VRPTW problem, metaheuristic algorithms i.e. Particle Swarm Optimization (PSO) have been found to work effectively, however, they can experience premature convergence. To lower the risk of PSO's premature convergence, the authors have solved VRPTW in this paper utilising a novel form of the PSO methodology that uses the Roulette Wheel Method (RWPSO). Computing experiments using the Solomon VRPTW benchmark datasets on the RWPSO demonstrate that RWPSO is competitive with other state-of-the-art algorithms from the literature. Also, comparisons with two cutting-edge algorithms from the literature show how competitive the suggested algorithm is

Measuring the Value of Time in Highway Freight Transportation

This research investigated several aspects of the value of time (VOT) in the trucking industry. This included examining the marginal monetary benefits and costs of reduced and prolonged freight transportation time on highways. First, a comprehensive survey estimated truckers’ perceived VOT by combining stated preference, utility theory, conditional logit modeling, and maximum likelihood function. From the data collected around major cities in Texas and Wisconsin, the truckers’ perceived VOT was estimated to be $54.98/vehicle/hour. Second, scenario-based simulation examined urban truckload operations, the purpose of which was to examine the fleet effect of individual vehicle delay on the carrier’s operation. Two of the most congested highway segments in Houston were used for the simulation, together with constrained delivery windows. The result showed that the scenario-based vehicle VOT varied from$79.81/vehicle/hour to $120.89/vehicle/hour. Third, VOT based on commodity delay only was examined in relationship to inventory management by assuming prolonged transportation time or freight delay. Delay of chemical products was ranked as the highest VOT at$13.89/truckload/hour, followed by food products at $7.24/truckload/hour. Finally, a continuous approximation technique was developed for fleet operations in the context of less-than-truckload deliveries. The trade-offs between travel time and roadway transportation cost were derived analytically and results were used to estimate fleet value of time. Ignoring time windows, the vehicle VOT for major distribution companies in Texas was estimated to be$15.50/vehicle/hour for highway trips and $22.00/vehicle/hour for local trips. To summarize, freight VOT is not only directly due to vehicles and drivers, but depends on fleet operations and supply chain management. The several approaches adopted in this research represent possible perspectives that need to be further examined. They each reveal a component of the entire shipping process that can be appropriately utilized to calculate the overall freight VOT in future studies. For example, an urgent delivery carrying chemical products can be estimated at a total congestion cost of$162.86/vehicle/hour. However, trips with different characteristics need to be treated individually andcarefully to avoid overestimation. It remains challenging tocombineall these different elements adequately to reach valid VOT for the trucking industry